CMS plan will incentivize generic drug use


A new federal rule aims to save money by further incentivizing the use of lower-cost generic drugs when available.

Seema Verma CMS administrator

Seema Verma

The Affordable Care Act provision, found in the final rule for the Notice of Benefit and Payment Parameters for the 2020 benefit year, will allow health insurers to exempt the value of drug manufacturer coupons from total out-of-pocket expenses when a lower-cost generic drug is available.

Patients will still be able to use drug manufacturer coupons and pay less at the pharmacy counter, but the money they spend won’t be applied to their out-of-pocket maximum if they choose the brand-name drug with coupon instead of the lower-cost generic.

The change will affect insurance plans offered in the individual market, small-group, large-group, and self-insured–group health plans.

The Centers for Medicare & Medicaid Services backed away from implementing two other generic drug provisions based on feedback on its draft proposal.

The provisions would have allowed insurers to remove brand-name drugs from a formulary midyear when a generic became available or move the drug to a higher tier, and allowed insurers to not count certain drug copayments toward the annual limits if the patient selected a brand-name drug when a generic was available.

“Based on issues raised by commenters, we are not finalizing these proposals,” CMS officials said.

Insurers “making mid-year formulary changes [should] only be permitted to move the brand-name drug to a different cost-sharing tier for the remainder of the plan year. [They] should not be allowed to remove a safe brand-name drug from the formulary until the time of plan renewal,” the American College of Physicians recommended in Feb. 12 comments on the proposal.

The final rule on Notice of Benefit and Payment Parameters for the 2020 benefit year also aims to provide more stability and lower premiums in the exchanges, according to CMS officials.

“The rule issued today will give consumers immediate premium relief by reducing the exchange user fees in the federally facilitated exchanges and state-based exchanges using the federal platform for 2020 thanks to successful efforts to improve the efficiency of the exchange,” CMS Administrator Seema Verma said in a statement.

CMS finalized a proposal to lower exchange user fees by 0.5%, fees that are generally passed on to consumers through premiums.

Other provisions cover exchange-related calculations, including how subsidies for exchange enrollees are calculated and how much enrollees are expected to contribute to benchmark plan premiums, which decreased slightly to 8.24%, down 0.07%, according to a CMS fact sheet.

For the out-of-pocket maximum, CMS said it “finalized a maximum annual limitation on cost sharing of $8,150 for self-only coverage and $16,300 for other than self-only coverage for the 2020 benefit year. This represents an approximately 3.16% increase above the 2019 parameters of $7,900 for self-only coverage and $15,800 for other than self-only coverage.”

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